Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 26, 1995
MARION MERRELL DOW INC.
(Exact name of registrant as specified in its charter)
Delaware 1-5829 44-0565557
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
9300 Ward Parkway, Kansas City, Missouri 64114
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (816) 966-4000
--------------
Not Applicable
- --------------------------------------------------------------------
(Former name or former address, if changed since last report)
Page 1 of 17 Pages
Exhibit Index is at Page 8
<PAGE> 2
Item 1. Changes in Control of Registrant.
---------------------------------
CHANGE IN CONTROL. On June 28, 1995, The Dow Chemical Company, a
Delaware corporation ("DCC"), RH Acquisition Corp., a Delaware corporation
and a wholly owned subsidiary of DCC ("RHAC"), and Dow Holdings Inc., a
Delaware corporation and a wholly owned subsidiary of DCC ("DHI" and DCC,
RHAC and DHI collectively are referred to herein as "Dow"), sold to H
Pharma Acquisition Corp., a Delaware corporation ("Acquisition"), all of
their 196,865,790 shares (the "Dow Shares") of the common stock, par value
$.10 per share (the "Common Stock"), of Marion Merrell Dow Inc., a Delaware
corporation (the "Registrant"). Acquisition is a direct wholly owned
subsidiary of Hoechst Corporation, a Delaware corporation ("Parent"), which
is a wholly owned subsidiary of Hoechst Aktiengesellschaft, a German
corporation ("Hoechst AG"). Acquisition purchased the Dow Shares, which
represent approximately 71.0% of the issued and outstanding shares of the
Registrant, pursuant to a Stock Purchase Agreement dated as of May 3, 1995
(the "Stock Purchase Agreement") among Parent, Acquisition, DCC, RHAC and
DHI, at a price of $25.75 per share in cash. The Stock Purchase Agreement
is incorporated herein by reference as Exhibit 2.1.
In connection with the execution and delivery of the Stock
Purchase Agreement, the Registrant, DCC, Acquisition and Parent entered
into an Agreement and Plan of Merger dated as of May 3, 1995 (the "Merger
Agreement"), which is incorporated herein by reference as Exhibit 2.6. The
purchase of the Dow Shares pursuant to the Stock Purchase Agreement is a
condition precedent to the consummation of the transactions contemplated by
the Merger Agreement. The Merger Agreement provides, among other things,
that (i) Acquisition will be merged with and into the Registrant (the
"Merger"), and the Registrant will be the surviving corporation and will
become a wholly owned subsidiary of Parent, and (ii) each share of Common
Stock issued and outstanding immediately prior to the effective time of the
Merger will, except as otherwise expressly provided in the Merger
Agreement, be converted into the right to receive $25.75 (plus, an
additional contingent amount calculated on the basis of a pro rata portion
of the Registrant's regular quarterly dividend) per share in cash.
RELATED REGULATORY MATTER. On June 26, 1995, the Federal Trade
Commission (the "FTC"), Hoechst AG, DCC and the Company entered into an
agreement (the "FTC Agreement") pursuant to which, among other things, (i)
the FTC agreed to cause the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act") to be
terminated by 11:00 a.m., EST, on June 27, 1995 and agreed not to take any
action which would interfere with consummation of the transactions
contemplated by the Stock Purchase Agreement and the Merger Agreement, (ii)
Hoechst AG and the Company agreed to cooperate with the FTC in the
completion of its investigation by responding promptly to requests for
documents and information pursuant to the FTC's June 9 request, (iii) DCC
agreed to cooperate with the FTC in its completion of its investigation by
responding promptly to specific requests for documents and information and
by making DCC's employees available for investigational hearings before the
FTC upon reasonable notice, (iv) Hoechst AG and the Company agreed to
divest certain pharmaceutical products and take certain other action in the
event the FTC later concludes that the acquisition of the Company by
Hoechst AG will tend substantially to lessen competition with respect to
such pharmaceutical products, (v) Hoechst AG agreed not to transfer or
encumber the voting securities of the Company held by Hoechst AG for a
period of 30 days following substantial compliance with the FTC's June 9
request for additional information (the "Hold Separate Period") and (vi)
<PAGE> 3
Hoechst AG agreed, subject to certain exceptions, to hold the Company
separate and apart and to operate it independently of Hoechst AG (including
not electing any affiliates of Hoechst AG to the Board) during the Hold
Separate Period. The FTC Agreement is not expected to delay consummation
of the Merger. The foregoing summary is qualified in its entirety by
reference to the FTC Agreement which is incorporated herein by reference as
Exhibit 2.7 and is attached hereto.
A Press Release issued by the Registrant on June 27, 1995,
announcing the FTC Agreement is incorporated herein by reference as Exhibit
99.2 and is attached hereto.
AMOUNT AND SOURCE OF CONSIDERATION. The total amount of funds
required by Acquisition to purchase the Dow Shares pursuant to the Stock
Purchase Agreement was approximately $5,069,294,092.50 plus the related
fees and expenses (the "Dow Share Purchase Price").
Acquisition obtained the Dow Share Purchase Price from, among
other things, initial equity contributions from Hoechst AG totalling $2.5
billion. Acquisition received additional funding from Parent in the form
of further equity contributions and loans. Parent obtained the funds to
make such equity contributions and loans from general corporate funds and
through borrowings from commercial banks and other sources. On June 22 and
23, 1995, respectively, Parent entered into definitive agreements with
respect to loans from two commercial banks in connection with Acquisition's
purchase of the Dow Shares. The foregoing summary is qualified in its
entirety by reference to the Loan Agreements incorporated herein by
reference as Exhibits 2.8 and 2.9, respectively.
CERTAIN ARRANGEMENTS AND UNDERSTANDINGS. In accordance with the
terms of the Stock Purchase Agreement, upon receipt of the Dow Share
Purchase Price, Dow granted Acquisition an irrevocable proxy and
irrevocably appointed Acquisition or its designees, with full power of
substitution, its attorney and proxy to vote all of the Dow Shares at any
meeting of the stockholders of the Registrant or in connection with any
action by written consent by the stockholders of the Registrant.
In accordance with the terms of the Merger Agreement, Parent,
Acquisition or their designated affiliates have the right to designate up
to such number of directors, rounded up to the next whole number, on the
Registrant's Board of Directors (the "Board") that equals the product of
(i) the total number of directors on the Board, and (ii) the percentage
that the number of shares of Common Stock owned by Acquisition and its
affiliates (including, the Dow Shares) bears to the total number of
outstanding shares of Common Stock. If Parent, Acquisition or any of their
affiliates exercises such right, the Registrant also would be obligated
under the Merger Agreement to use its reasonable best efforts to cause
persons designated by Acquisition to constitute the same percentage as is
on the Board of (i) each committee of the Board, (ii) each board of
directors of each subsidiary of the Registrant designated by Acquisition
and (iii) each committee of each such board. DCC also agreed that, at the
time of Acquisition's purchase of the Dow Shares pursuant to the Stock
Purchase Agreement, it would use its reasonable best efforts, in accordance
with the terms of the Merger Agreement, to cause each employee of DCC who
is on the Board to resign from the Board and from the board of directors of
any subsidiary of the Registrant on which such individual serves. Parent
and Acquisition, however, have waived such right against DCC until the
earlier of (i) the effective time of the Merger and (ii) any subsequent
notice to DCC from Acquisition and Parent revoking their waiver of such
<PAGE> 4
right. In addition, pursuant to the Merger Agreement, the Registrant
agreed to use its reasonable best efforts to ensure that all of the members
of the Board as of May 3, 1995, who are not employees of DCC, shall remain
members of the Board until the effective time of the Merger. The
Registrant's obligations to appoint designees to the Board are subject to
Section 14(f) of the Securities Exchange Act of 1934 and Rule 14f-1
promulgated thereunder. Acquisition has indicated to the Registrant that
it has no current plans to designate any directors to the Board prior to
the effective time of the Merger. On June 28, 1995, in connection with the
purchase of the Dow Shares by Acquisition, the three DCC representatives on
the Board voluntarily resigned as directors of the Registrant.
The Registrant, Parent, DCC or their respective affiliates also
entered into the following agreements, dated as of May 3, 1995, addressing
proposed modifications to business operations arrangements between DCC and
the Registrant: (i) Indemnity Agreement, in which Parent agreed to
indemnify DCC in respect of DCC's existing guaranty in favor of the
investors in Carderm Capital L.P. (incorporated herein by reference as
Exhibit 2.2); (ii) Tax Allocation Agreement, in which DCC, Parent and the
Registrant have agreed to an allocation of certain tax liabilities
(incorporated herein by reference as Exhibit 2.3 ); and (iii) Insurance
Separation Agreement, in which Parent, the Registrant, DCC and three wholly
owned insurance subsidiaries of DCC have agreed to certain matters
regarding insurance, reinsurance and related topics (incorporated herein by
reference as Exhibit 2.4).
Roussel Uclaf S.A. ("Roussel"), a French societe anonyme and a
majority owned subsidiary of Hoechst AG, entered into an agreement dated as
of May 3, 1995, with certain affiliates of DCC (the "Latin American
Purchase Agreement"), to acquire the pharmaceutical business operated by
DCC affiliates in Argentina, Brazil, Mexico and elsewhere in Central and
South America (the "Latin American Pharmaceutical Business"). Pursuant to
and subject to the terms and conditions of the Latin American Purchase
Agreement, which is incorporated herein by reference as Exhibit 2.5,
Roussel and/or its designated affiliates will purchase the assets of the
Latin American Pharmaceutical Business (other than real property and
certain other specified assets) for $140 million, subject to adjustment as
provided in the Latin American Purchase Agreement. Closing under the Latin
American Purchase Agreement is conditioned upon, among other things,
Hoechst AG having acquired, directly or indirectly, at least a majority of
the shares of Common Stock outstanding on a fully diluted basis.
The foregoing summaries are qualified in their entirety by
reference to the actual documents incorporated by reference. A Press
Release issued by the Registrant on May 4, 1995, announcing the execution
of the Merger Agreement and the Stock Purchase Agreement is incorporated
herein by reference as Exhibit 99.1. Also, a Press Release issued by the
Registrant on June 28, 1995, announcing the purchase of the Dow Shares by
Acquisition is incorporated herein by reference as Exhibit 99.3 and is
attached hereto.
Item 7. Financial Statements and Exhibits.
----------------------------------
(c) Exhibits.
Exhibit 2.1 Stock Purchase Agreement dated as of May 3, 1995,
among Hoechst Corporation, H Pharma Acquisition
Corp., The Dow Chemical Company, RH Acquisition
<PAGE> 5
Corp. and Dow Holdings Inc. (incorporated herein
by reference to Exhibit 2.2 to the Current Report
on Form 8-K of DCC dated May 3, 1995).
Exhibit 2.2 Indemnity Agreement dated as of May 3, 1995,
between Hoechst Corporation and The Dow Chemical
Company (incorporated herein by reference to
Exhibit 2.3 to the Current Report on Form 8-K of
DCC dated May 3, 1995).
Exhibit 2.3 Tax Allocation Agreement dated as of May 3, 1995,
among The Dow Chemical Company, Hoechst
Corporation and Marion Merrell Dow Inc.
(incorporated herein by reference to Exhibit 2.4
to the Current Report on Form 8-K of DCC dated May
3, 1995).
Exhibit 2.4 Insurance Separation Agreement dated as of May 3,
1995, among The Dow Chemical Company, Hoechst
Corporation, Marion Merrell Dow Inc., Dorinco
Insurance Company, Dorintal Reinsurance Ltd. and
Timber Insurance Ltd. (incorporated herein by
reference to Exhibit 2.8 to the Current Report on
Form 8-K of DCC dated May 3, 1995).
Exhibit 2.5 Purchase Agreement dated as of May 3, 1995,
between Latin American Pharmaceutical Inc., Dow
Quimica Argentina S.A., Dow Quimica Mexicana S.A.,
Dow Productos Quimicos LTDA, Mineracao e Quimica
de Nordeste, Dow Quimica S.A., Merrell Lepetit
Farmaceutica Industrial LTDA, Laboratorios Lepetit
de Mexico S.A. de C.V. and Roussel Uclaf S.A.
(incorporated herein by reference to Exhibit 2.14
to the Current Report on Form 8-K of DCC dated May
3, 1995).
Exhibit 2.6 Agreement and Plan of Merger dated as of May 3,
1995, by and among Marion Merrell Dow Inc., The
Dow Chemical Company, Hoechst Corporation and H
Pharma Acquisition Corp. (incorporated herein by
reference to Exhibit 2 to the Current Report on
Form 8-K of the Registrant dated May 3, 1995).
Exhibit 2.7 Agreement to Hold Separate dated as of June 26,
1995, by and among Hoechst AG, The Dow Chemical
Company, Marion Merrell Dow Inc. and the Federal
Trade Commission.
Exhibit 2.8 Loan Agreement dated June 22, 1995, between Dai-
Ichi Kangyo Bank and Hoechst Corporation
(incorporated herein by reference to Exhibit 18 to
the Schedule 13D (Amendment No. 1) of Parent and
Acquisition dated June 30, 1995).
Exhibit 2.9 Loan Agreements dated June 23, 1995, between
Dresdner Bank AG and Hoechst Corporation
(incorporated herein by reference to Exhibit 19 to
the Schedule 13D (Amendment No. 1) of Parent and
Acquisition dated June 30, 1995).
<PAGE> 6
Exhibit 99.1 Press Release issued by the Registrant on May 4,
1995 (incorporated herein by reference to Exhibit
99 to the Current Report on Form 8-K of the
Registrant dated May 3, 1995).
Exhibit 99.2 Press Release issued by the Registrant on June 27,
1995.
Exhibit 99.3 Press Release issued by the Registrant on June 28,
1995.
<PAGE> 7
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
MARION MERRELL DOW INC.
Date: June 30, 1995 By: /s/ Rebecca R. Tilden
---------------------
Name: Rebecca R. Tilden
Title: Assistant Vice President,
Assistant General Counsel and
Assistant Corporate Secretary
<PAGE> 8
EXHIBIT INDEX
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Exhibit Description Page
- ------- ----------- ----
2.7 Agreement to Hold Separate dated as 9
of June 26,1995, by and among Hoechst AG,
The Dow Chemical Company, Marion Merrell
Dow Inc. and the Federal Trade Commission.
99.2 Press Release issued by the Registrant on 16
June 27, 1995.
99.3 Press Release issued by Registrant on 17
June 28, 1995.
<PAGE> 9
EXHIBIT 2.7
------------
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
In the Matter of )
)
) File No. 951-0090
HOECHST AG,, )
a corporation. )
AGREEMENT TO HOLD SEPARATE
This Agreement to Hold Separate ("Hold Separate") is by and among
Hoechst AG ("Hoechst"), The Dow Chemical Company ("Dow"), Marion Merrell
Dow Inc., ("MMD"), and the Federal Trade Commission ("Commission").
WHEREAS, Hoechst, through its U.S. subsidiary, Dow and MMD have
entered into a Stock Purchase Agreement and an Agreement and Plan of
Merger, both dated May 3, 1995 (collectively "Agreements"), pursuant to
which Hoechst will acquire all of the voting securities of and merge with
MMD ("Merger"); and
WHEREAS, Hoechst, a corporation organized, existing, and doing
business under and by virtue of the laws of Germany, with its office and
principal place of business located at D-65926, Frankfurt am Main, Germany,
is engaged in, among other things, the research, development, manufacture
and sale of pharmaceutical products; and
WHEREAS, MMD, a corporation organized, existing, and doing
business under and by virtue of the laws of Delaware, with its office and
principal place of business at 9300 Ward Parkway, Kansas City, Missouri
64114, is engaged in the research, development, manufacture and sale of
pharmaceutical products; and
WHEREAS, Dow is a corporation organized, existing and doing
business under and by virtue of the laws of Delaware, with its office and
principal place of business at 2030 Dow Center, Midland, Michigan 48674;
and
WHEREAS, the Commission, an independent agency of the United
States Government, established under the Federal Trade Commission Act, 15
U.S.C. Sec. 41, et seq., is investigating the Merger to determine whether it
would violate any of the statutes enforced by the Commission; and
WHEREAS, Hoechst, Dow and MMD have submitted information to the
Commission and intend to cooperate fully with the Commission in its
investigation; and
WHEREAS, Hoechst, Dow and MMD desire to consummate the Merger as
contemplated by the Agreements; and
WHEREAS, the Commission has indicated that it requires time
beyond June 27, 1995, within which to complete its investigation regarding
the competitive effects of the Merger;
<PAGE> 10
NOW, THEREFORE, Hoechst, Dow and MMD and the Commission agree as
follows:
1. The Commission will cause the waiting period under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976 to be terminated no later
a.m. EST on June 27, 1995, and will take no action to inter
re with consummation of the Merger as contemplated by the Agreements (it
being understood that Hoechst may acquire Dow's shares in MMD as soon as
June 28, 1995).
2. Hoechst and MMD agree to cooperate with the Commission in
the completion of its investigation by responding promptly to the requests
for documents and information contained in the "Request for Additional
Information and Documentary Material" that the Commission issued to Dow
(then including MMD) and Hoechst on June 9, 1995 and by making their
employees available for investigational hearings before the Commission upon
reasonable notice. Dow agrees to cooperation with the Commission in the
completion of its investigation by responding promptly to specific requests
for documents and information and by making its employees available for
investigational hearings before the Commission upon reasonable notice.
3. If, within 30 days after Hoechst, Dow and MMD have
substantially complied with all Commission requests as provided for in
Paragraph 2, the Commission concludes that a merger of Hoechst and MMD will
tend substantially to lessen competition with respect to the research,
development, manufacture or sale of certain pharmaceutical products subject
to the Agreement Containing Consent Order, Hoechst agrees not to contest
that determination, PROVIDED THAT Hoechst and MMD shall have been afforded
an opportunity to meet with officials within the Commission, including the
Directors of the Bureau of Competition and the Bureau of Economics, and the
Chairman and Commissioners of the Commission.
4. In the event of such determination by the Commission,
Hoechst hereby consents and agrees to be bound by the terms of an Agreement
Containing Consent Order, in the form attached hereto as Exhibit 1, and not
to challenge the jurisdiction of the Commission to issue such Order.
5. During the time contemplated by Paragraph 3 of this
Agreement to Hold Separate, in order to preserve the divestability of the
MMD voting securities, Hoechst agrees that it will not sell, transfer,
encumber, or (to the extent within Hoechst's control) limit or otherwise
impair the marketability or viability of the MMD voting securities or sell,
transfer, encumber, or (to the extent within Hoechst's control) limit or
otherwise impair the marketability or viability of the underlying MMD
assets, other than in the ordinary course of business. For the purposes of
this Agreement to Hold Separate, "MMD voting securities" means all shares
of MMD common stock, whether purchased from Dow or otherwise acquired.
6. During the time contemplated by Paragraph 3 of this
Agreement to Hold Separate, in order to ensure the complete independence
and viability of MMD and to assure that no competitive information is
exchanged between MMD and Hoechst, Hoechst will hold MMD separate and apart
on the following terms and conditions:
a. MMD, as it is presently constituted (including
subsidiaries, divisions, groups and affiliates controlled by MMD),
shall be held separate and apart and shall be operated independently
of Hoechst (meaning here and hereinafter, Hoechst excluding MMD);
PROVIDED HOWEVER that Hoechst may exercise only such direction and
<PAGE> 11
control over MMD as is necessary to assure compliance with this
Agreement to Hold Separate, the Agreement Containing Consent Order,
and the Order; and FURTHER PROVIDED, HOWEVER, that nothing in this
subparagraph (a) shall be construed to preclude Hoechst from providing
cash management services to MMD on a contract basis.
b. Hoechst shall not exercise direction or control over,
or influence, directly or indirectly, MMD or any of its operations or
businesses; PROVIDED HOWEVER, that Hoechst may exercise only such
direction and control over MMD as is necessary to assure compliance
with this Agreement to Hold Separate, the Agreement Containing Consent
Order, and the Order; and FURTHER PROVIDED, HOWEVER, that nothing in
this subparagraph (b) shall be construed to preclude Hoechst and MMD
from performing any obligations under the Settlement and Release
Agreement executed between Hoechst and Biovail Corporation
International on April 8, 1995.
c. Hoechst shall maintain the viability and marketability
of the MMD voting securities and the underlying MMD assets and, other
than in the ordinary course of business, shall not sell, transfer,
encumber, or (to the extent within Hoechst's control) limit, or
otherwise impair the marketability or viability of the underlying MMD
assets, and shall not sell, transfer, encumber, or (to the extent
within Hoechst's control) limit, or otherwise impair the marketability
or viability of the MMD voting securities.
d. The MMD Board of Directors shall have exclusive
authority for managing MMD, and shall consist exclusively of
individuals who are not officers, directors or employees of Hoechst.
e. The individuals on the MMD Board of Directors shall not
be involved in any way in the research, development, manufacturing,
marketing or selling of pharmaceuticals (other than through MMD's
operations as presently constituted). Each of these individuals, the
management of MMD and Hoechst, and the directors, officers, or
employees responsible for the operation of MMD will receive the
notification appended as Attachment A hereto.
f. If necessary to assure compliance with the terms of
this Agreement to Hold Separate, the Agreement Containing Consent
Order, and the Order, Hoechst may, but is not required to, assign an
individual to MMD for the purpose of overseeing such compliance ("on-
site person"). The on-site person shall have access to all officers
and employees of MMD and such records of MMD as he deems necessary and
reasonable to assure compliance. Such individual shall enter into a
confidentiality agreement with Hoechst agreeing to be bound by the
terms and conditions of Attachment A, appended hereto.
g. Except as required by law, and except to the extent
that necessary information is exchanged in the course of evaluating
the merger, defending investigations or litigation, or negotiating
agreements to divest assets, Hoechst shall not receive or have access
to, or the use of, any material confidential information about MMD or
the activities of the MMD Board of Directors in managing the business
that is not in the public domain. Nor shall the MMD Board of
Directors, any individual member of the MMD Board of Directors, or the
on-site person receive or have access to, or the use of, any material
confidential information about Hoechst's pharmaceutical businesses or
activities not in the public domain. Hoechst may receive on a regular
<PAGE> 12
basis from MMD aggregate financial information necessary and essential
to allow Hoechst to prepare consolidated financial reports, tax
returns, and personnel reports. "Material confidential information,"
as used herein, means competitively sensitive information, not
independently known to Hoechst from sources other than the MMD Board
of Directors and includes, but is not limited to, customer lists,
price lists, bidding lists, marketing methods, marketing plans, sales
plans, long range planning documents, patents, technologies,
processes, or other trade secrets.
h. Hoechst shall not remove or replace any member of the
MMD Board of Directors, or the on-site person except as provided
below:
(1) Hoechst may remove and replace anyone for cause, death,
disability, or resignation from service with MMD;
(2) Hoechst may remove any member of the MMD Board of
Directors if a conflict of interest develops in that member's
role as a potential purchaser of the MMD voting securities or any
MMD assets and that member's role as a Director of MMD;
(3) Hoechst may replace any member of the MMD Board of
Directors or officer of MMD after providing the Commission with
sixty (60) days advance written notice; and
(4) Hoechst may replace any individual who interferes in
any way with Hoechst's ability to comply with the terms of this
Agreement to Hold Separate, the Agreement Containing Consent
Order, and the Order.
PROVIDED HOWEVER, that each individual newly appointed to the MMD Board of
Directors, pursuant to this subparagraph, must conform to all terms and
conditions of this Agreement.
i. Hoechst shall provide MMD with its share of working
capital as MMD requests from time to time.
j. Should the Commission seek in any proceeding to compel
Hoechst to divest itself of the MMD voting securities or the MMD
assets subject to the Agreement Containing Consent Order, Hoechst
shall not raise any objection based on the expiration of the
applicable Hart-Scott-Rodino Antitrust Improvements Act waiting period
or the fact that the Commission has permitted the merger. Hoechst
also waives all rights to contest the validity of this Agreement to
Hold Separate.
7. During the time contemplated by Paragraph 3 of this
Agreement to Hold Separate, in order to preserve the divestability of the
Hoechst assets subject to the Agreement Containing Consent Order, Hoechst
agrees that it will not sell, transfer, encumber, limit or otherwise impair
the marketability or viability of the underlying Hoechst assets subject to
the Agreement Containing Consent Order, other than in the ordinary course
of business.
8. To the extent that this Agreement to Hold Separate requires
Hoechst to take, or prohibits Hoechst from taking, certain actions which
otherwise may be required or prohibited by contract, Hoechst shall abide by
the terms of the Agreement to Hold Separate, the Agreement Containing
Consent Order and the Order, and shall not assert as a defense such
<PAGE> 13
contract requirements in a civil penalty action or any other action brought
by the Commission to enforce the terms of this Agreement to Hold Separate,
the Agreement Containing Consent Order or the Order.
9. For the purpose of determining or securing compliance with
this Agreement to Hold Separate, subject to any legally recognized
privilege, and upon written request with reasonable notice to Harry R.
Benz, Hoechst Corporation, Route 202-206, P.O. Box 2500, Somerville, NJ
08876, Hoechst's United States subsidiary, Hoechst (which, for purposes of
this paragraph only includes MMD) shall permit any duly authorized
representative or representatives of the Commission:
a. Access during the office hours of Hoechst and in the
presence of counsel to inspect and copy all books, ledgers, accounts,
correspondence, memoranda, and other records and documents in the
possession or under the control of Hoechst relating to compliance with
this Agreement to Hold Separate;
b. Upon five (5) days' notice to Hoechst, and without
restraint or interference from Hoechst, to interview officers or
employees of Hoechst, who may have counsel present, regarding any such
matters.
10. This Agreement to Hold Separate shall not be binding until
approved by the Commission.
FEDERAL TRADE COMMISSION HOECHST AG
/s/ Jay C. Shaffer /s/ Karl-Gerhard Seifert
- -------------------------------- ------------------------------
Jay C. Shaffer Dr. Seifert
Acting General Counsel Member of the Board
/s/ Peter Schuster
------------------------------
Peter Schuster
General Counsel
/s/ William C. Pelster
------------------------------
William C. Pelster
Joel M. Mitnick
Skadden, Arps, Slate, Meagher,
& Flom
Counsel for Hoechst AG
THE DOW CHEMICAL COMPANY
/s/ Jane M. Gootee
------------------------------
Jane M. Gootee
Assistant General Counsel
<PAGE> 14
/s/ Robert E. Bloch
------------------------------
Robert E. Bloch
Scott P. Perlman
Mayer, Brown & Platt
Counsel for The Dow Chemical
Company
MARION MERRELL DOW INC.
/s/ Edward H. Stratemeier
------------------------------
Edward H. Stratameier
Vice President and Assistant
General Counsel
Dated: June 26, 1995
<PAGE> 15
ATTACHMENT A
NOTICE OF HOLD SEPARATE
AND REQUIREMENT FOR CONFIDENTIALITY
Hoechst AG ("Hoechst") has entered into a Hold Separate Agreement
with the Federal Trade Commission relating to the to be acquired interest
in Marion Merrell Dow Inc. ("MMD"). Until after the Commission completes
its investigation, MMD must be managed and maintained as a separate,
ongoing business, independent of all other competing businesses of Hoechst.
All competitive information relating to MMD must be retained and maintained
by the persons responsible for the management of MMD on a confidential
basis and such persons shall be prohibited from providing, discussing,
exchanging, circulating, or otherwise furnishing any such information to or
with any other person whose employment involves any competing Hoechst
pharmaceutical business. Similarly, all such persons responsible for the
management of Hoechst's competing pharmaceutical businesses shall be
prohibited from providing, discussing, exchanging, circulating or otherwise
furnishing competitive information about such businesses to or with any
person responsible for MMD.
Any violation of the Hold Separate Agreement may subject Hoechst
to civil penalties and other relief as provided by law.
<PAGE> 16
EXHIBIT 99.2
MARION MERRELL DOW INC. ANNOUNCES
AGREEMENT WITH FEDERAL TRADE COMMISSION
TO ALLOW MERGER TO PROCEED
KANSAS CITY, Mo., June 27, 1995 - Marion Merrell Dow Inc. today announced
that an agreement has been reached with the Federal Trade Commission (FTC)
to allow the acquisition of Marion Merrell Dow (NYSE: MKC) by Hoechst
Corporation, a wholly owned subsidiary of Hoechst AG.
Under the agreement, the FTC will terminate its waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act and will allow the transaction
to take place, while the companies will continue to cooperate with the
FTC's ongoing review in certain specified areas. During the review period,
the companies will be operated separately.
Under definitive agreements announced by the companies on May 4, Hoechst's
purchase of the Marion Merrell Dow shares owned by The Dow Chemical Company
(approximately 197 million shares, or 71 percent of the outstanding stock)
is expected to be completed shortly. The price will be $25.75 per share in
cash, or about $5.1 billion.
A special meeting of Marion Merrell Dow shareholders is scheduled for July
18 to vote on the proposed merger, although approval is assured because
Hoechst has committed to vote the 71 percent of the shares that it will
acquire from Dow in favor of the transaction. An information statement
regarding the shareholders' meeting will be sent to Marion Merrell Dow
shareholders later this week.
Following the special meeting, the merger will become effective and
minority shareholders of Marion Merrell Dow (who own approximately 80
million shares, or 29 percent) will receive letters of transmittal
explaining how to obtain payment for their shares. The merger
consideration will be $25.75 per share in cash, plus an additional amount
based upon a pro rata portion of the regular quarterly dividend depending
on the timing of the closing of the merger.
Regulatory authorities in the European Union and Canada had previously
indicated they would permit the transaction.
<PAGE> 17
EXHIBIT 99.3
MARION MERRELL DOW INC. ANNOUNCES
PURCHASE OF MAJORITY OWNERSHIP BY HOECHST
KANSAS CITY, Mo., June 28, 1995 - Marion Merrell Dow Inc. (NYSE: MKC) today
announced that a wholly owned subsidiary of Hoechst AG has purchased
approximately 197 million shares, or 71 percent, of Marion Merrell Dow's
outstanding common stock from The Dow Chemical Company. The price was
$25.75 per share, or about $5.1 billion.
The remaining 29 percent, or approximately 80 million shares, will be
acquired by Hoechst through a merger. A special meeting of shareholders is
scheduled for July 18 to vote on the transaction, although approval is
assured because Hoechst has committed to vote its 71 percent of the shares
in favor. An information statement is being sent to Marion Merrell Dow
shareholders today. Following the special meeting, the merger will become
effective and minority shareholders will receive letters of transmittal
explaining how to obtain payment of $25.75 per share in cash, plus an
additional amount based upon a pro rata portion of the regular quarterly
dividend depending on the timing of the closing of the merger.
